Contributing to super in retirement

12 December 2022

The ‘traditional’ view of superannuation is that you add to it during your working life and then use it to help support yourself in retirement. However, everyone’s financial situation is different, and although you may have retired and opened a Brighter Super Pension account, you could find yourself in a position of wanting to add more to your super.

There could be many reasons for this; for example, you may have come into an inheritance, you might want to restructure your finances to take advantage of the tax concessions super can offer, or it could be part of an estate planning strategy.

So, what are your options if you want to contribute to your super in retirement?

How you can contribute

If you have gone back into the workforce (or never even really left it), your employer will most likely be making superannuation guarantee contributions. There is no age limit on either of these types of contributions. If you are under 75 you can also make additional before-tax contributions via salary sacrifice (although the concessional contribution cap does limit how much you can contribute).

You can also make after-tax contributions, but the great news is that most people are now able to make contributions to your super even when no longer working. Previously you needed to meet a work test if you wanted to add money to your super in retirement, but that was scrapped on 1 July 2022. Now anyone under the age of 75 can make after-tax contributions to super at any time.

You can’t make these contributions to your Brighter Super Pension account – you have to make them to an Accumulation account. If you don’t already have a Brighter Super Accumulation account it’s easy to open one in Member Online, or by completing the form in the Accumulation Account Product Disclosure Statement. Because we don’t charge a fixed fee per account you won’t pay any more in administration fees for having two accounts.

Making a contribution is easy too – all you need to do is log in to Member Online to get your BPAY details and make a payment from your bank account. If you haven’t registered for Member Online it’s easy to do on our website. You can also call us on 1800 444 296 and one of our super specialists will help you.

Know your limits

You need to be aware that there are contribution caps in place that limit how much you can contribute to super after tax. Currently the non-concessional (after-tax) cap is $110,000 per year. If you have a larger sum to contribute you can generally ‘bring forward’ the next two years’ worth of contributions, up to a maximum of $330,000. There are also maximum balance restrictions which may impact some members.

You can find more information in our Contribution caps info sheet.

Downsizer contributions

The Federal Government downsizer initiative means that if you are age 60 or older and sell your primary place of residence, you can contribute up to $300,000 of the proceeds to your super. If you have a partner older than 60, they can also contribute up to $300,000 to their super. From 1 January 2023 the eligible age for downsizer contributions will reduce to 55.

You don’t pay any tax on this contribution when it goes into your super, and it doesn’t count towards your contribution cap. There are a few eligibility conditions, which you can find out more about on the Australian Tax Office (ATO) website.

Options after you’ve contributed

After you’ve contributed to your super, you need to decide whether you want to leave it in an Accumulation account or move it to a Pension account, where you won’t pay tax on investment returns. You can make withdrawals from either type of account, but there are rules around the minimum amount you must withdraw from a Pension account that don’t apply to Accumulation accounts. Which type of account is best for you will depend on your own circumstances.

If contributing the additional funds to a Pension account is the best option for you, you have two options. Importantly, you aren’t able to contribute additional money to your existing Brighter Super Pension account.

1. You can choose to close your existing account, roll the money into your Brighter Super Accumulation account, and then open a new Brighter Super Pension account with the combined funds.
2. Alternatively, you can open a new Pension account to run alongside your existing Brighter Super Pension accounts.

You can find more information on both these options in the Brighter Super Pension Account PDS.

Get the right advice

As your super can have a big impact on any Age Pension or other Government benefits or concessions you may be receiving, you should seek advice before making additional contributions to your super in retirement.

An adviser can also help you decide whether you should keep your contributions in an Accumulation account, open a separate Pension account or close your existing account and open a new one.

At Brighter Super we have a team of financial advisers who understand your Brighter Super account and can offer the advice you need to make the decisions that are best for you.

Simply complete our online contact form and note in the comments that you’d like to hear more about contributing in retirement. One of our team will be in touch to discuss which of our financial advice options would be most appropriate for your needs.